Asian stocks are mixed in response to the release of the Fed minutes and the growing political concerns in the US, let alone domestically here in Australia. Local stocks continue to slip alongside the Australian dollar as sovereign risk builds over the direction of the federal government.
The Shanghai Composite has rebounded after the long lunch break, currently up by nearly 0.6% to 2731 points going into the close, still holding on above previous weekly support at the 2700 point level. The Hang Seng Index is treading water again, off by about 0.3% at 27845 points, again still below terminal support at 28000 points as it comes up against the overhead downtrend line. It really needs to start making some new daily highs here:
S&P futures are flat alongisde the Eurostoxx, as traders await more legalese coming from Washington overnight. The recent USD weakness looks to be turning here, which could boost US stocks higher, but price action on the four hourly chart is looking exhausted, unable to close above the weekly high around the 2860 level:
Japanese stocks are slowly moving higher, this time helped by a much weaker Yen with the Nikkei 225 closing 0.2% higher at 22410 points, building momentum on its daily chart. The USDJPY pair has broken above trailing ATR resistance on the four hourly chart, almost getting up to the 111 handle in what looks like a solid breakout:
The ASX200 continues its retreat below previous resistance at the 6300 point level as the continued political shenanigans turn into possible sovereign risk, losing 0.2% to close at 6250 points. The Aussie dollar has now rejected its recent bounceback where it was unable to get back above the 74 handle previously and capitulated below the 73 handle as trader’s weigh up the building risks:
The economic calendar will be swamped with preliminary PMI releases on both sides of the Atlantic, but the key one to watch is the ECB’s monetary policy meeting minutes.